IRS Eases Receipt Requirement

WASHINGTON - The Internal Revenue Service announced today a significant change for employers and employees by raising the requirement for many business receipts from $25 to $75 starting Oct. 1, 1995.

The law requires taxpayers to have adequate records for proof of expenses such as traveling, entertainment or gifts in order to claim a deduction. Current regulations allow a deduction if taxpayers have a receipt for lodging when on business travel, and have receipts for other expenses of $25 or more. The $25 threshold dates back to 1962.

IRS Commissioner Margaret Milner Richardson said, "This change is part of our ongoing efforts to make government work better and cost less. It will make recordkeeping a lot less difficult for businesses and employees. We are working hard to update our regulations whenever possible or simply eliminate them if we can."

Other adequate accounting rules require employers who reimburse employees for business expenses to obtain and keep records such as receipts provided by employees and to produce them if IRS requests. IRS is reviewing these rules to determine whether changes should be made to provide alternative ways to satisfy these recordkeeping requirements. IRS invites the public to comment on this matter. The address to send comments and further information can be found in Notice 95-50. This notice will appear in Internal Revenue Bulletin 1995-42 dated Oct. 16, 1995 and is attached.

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